The CFTC has announced a $1.8 million settlement with brokerage firm FalconX

The United States Commodity Futures Trading Commission (CFTC) has announced that it has settled a lawsuit against cryptocurrency brokerage firm Falcon Labs for an estimated $1.8 million in disgorgement and penalties.

In a May 13 notice, the CFTC said Falcon Labs, owned by FalconX, failed to register as a futures commission trader, saying it “improperly facilitated.”[ing] Access to Digital Asset Exchange. The settlement forces FalconX to stop providing services to US residents and pay nearly $1.2 million in fraud and $600,000 in civil money penalties.

“The CFTC's enforcement program has made clear that it will not tolerate digital asset exchanges that fail to register with the CFTC or comply with the agency's rules,” said Ian McGinley, director of enforcement. “And now, for the first time, the CFTC is taking the fight a step further by charging an intermediary that improperly facilitated access to those exchanges.”

The settlement said FalconX facilitated the ordering of digital asset derivatives for US consumers through its ‘Edge' product from October 2021 to March 2023. According to the CFTC, the brokerage has voluntarily reformed its practices following a lawsuit against Binance and former CEO Changpeng Zhao. In that case, the CFTC and other US authorities in 2010 They agreed on $4.3 billion in November 203.

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The regulator stated that Falcon X provided “substantial cooperation and improvement”, as a result of which the company received a lower penalty. The CFTC's order includes whether the firm “accepts or rejects” any regulatory findings or conclusions. Cointelegraph reached out to FalconX but did not receive a response at the time of publication.

On May 6, CFTC Chairman Rustin Behnam said that crypto companies operating in the US can expect “another round of enforcement actions” in two years. The commodity regulator has proposed 47 enforcement actions against crypto companies by 2023.

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